We consider a New Keynesian model with a variable term premium and scope for central bank asset purchases to matter. Current and future asset purchase policies have varying effects on output. We derive an analytic expression for the central bank's loss function, which directly penalizes term...

We study monetary policy in a New Keynesian model with a variable credit spread and scope for central bank asset purchases to matter. A novel financial and labor market interaction generates an endogenous cost-push channel in the Phillips curve and a credit wedge in the IS curve. The “divine...

This paper analyzes the implications of the gradual rise in bank concentration since the 1990s for the transmission of monetary policy. I use branch-level data on deposit and loan rates to evaluate the monetary policy pass-through conditional on the level of local bank concentration and bank...

We derive optimal monetary policy in a New Keynesian model with central bank asset purchases, accounting for an occasionally binding zero lower bound, ZLB, on the policy rate. Potential gains to central bank asset purchases arise with the policy rate away from the ZLB due to a constraint on the...

Two traditional explanations for the mean and variability of the term premium are: (i) time-varying risk premia on long bonds, and (ii) segmented markets between long- and short-term bonds. This paper integrates these two approaches into a medium-scale DSGE model. We consider two sources of...

This paper studies the term premium in a general equilibrium model with a financial constraint and central bank asset purchases. Structural estimates of the term premium match past empirical measures. Term premium dynamics are policy dependent, with Federal Reserve quantitative easing programs...